It moves, it moves. The huge container ship that has been blocking the Suez Canal for a week was freed at dawn on Monday. “It's not completely straightened out yet” brakes Shoei Kisen, the Japanese owner of Ever Given, also because it seems that the rudder is out of order. But the news contributed to the good mood of operators at the start of the week and favored the drop in WTI oil below 60 dollars a barrel.
MARGIN CALLS JUMP, 20 BILLION AT RISK
To spoil the party, however, a bolt from the blue came from Wall Street: the collapse of the Archegos family office, promoted by Billy Wang, a former lieutenant of the legendary Julian Robertson of the Tiger Fund, who was unable to integrate the " margin call” on his position. Goldman Sachs and Morgan Stanley thus flooded the market on Friday with sales without price limit on Viacom shares (-27,5%) as well as on the Chinese giants Baidu and Tencent, respectively down -33,5 and 48%. The amount of the losses is not yet clear, but there is talk of at least 20 billion dollars distributed among the most beautiful names on Wal Street. Nomura alone admitted to a two billion dollar hole.
NOMURA LOSES 15%, UNDER BAIDU PRESSURE
The two pieces of news characterize the opening of the markets:
– the MSCI Asia Pacific index is up by 0,1%, Tokyo's Nikkei by 1%, Hong Kong's Hang Seng by 0,4%, the CSI 300 index in Shanghai and Shenzen by 0,8, 1% and the BSE Sensex of Mumbai by XNUMX%.
- The effect of crack in the USA is felt on Nomura -15%.
- Baidu -3% is also affected by forced selling. Today the IPO of Bilibili is held in Hong Kong, the latest successful start-up on the Chinese internet which is now deserting the US Stock Exchange.
FUTURES ON US EXCHANGES DOWN
- Wall Street's S&P 500 index future is down 0,5% this morning, US stocks hit a new high on Friday.
- The dollar is slightly appreciating against most of the reference currencies. Euro-dollar cross at 1,177.
- Signs of concern about the consequences of the Archegos crisis are multiplying in the chats, which is already looming as the largest "margin call" in the history of finance. But what happened?
Late Friday afternoon some large investment banks, Goldman Sachs and Morgan Stanley in the lead, began to sell off shares of some big names in the entertainment industry, including Viacom, Discovery, Tencent Music. In the following hours it emerged that these packages came from Archegos Capital, a small New York management company that ended up under water due to an excess of speculative positions with exaggerated leverage. The house of cards set up by a trading superstar Bill Hwang, thanks to the support of some big names in international finance, collapsed when the same big lenders, worried about the performance of some trading operations, asked to increase the margin safeguard, or to close out positions at a loss.
Something went wrong, and as a result, there were approximately $20 billion in discount sales on Friday. These broadsides brought Discovery and Viacom to their knees, which lost a quarter of their value on Friday.
TODAY THE BIDEN PLAN: THE TAXES ARE COMING
The Archegos affair will distract Wall Street's attention for a few hours from the news arriving from Pittsburgh where today President Joe Biden will announce the guidelines of the most demanding program of his mandate: at least 3 trillion dollars to invest in infrastructure, but also in education in welfare. Is the market's attention focused on one question? Who will pay the bill for a maneuver which, all inclusive, is worth 15% of US GDP? Biden will talk about taxes, both on income for those earning $400 and more, and on corporations, reversing the line followed by Trump.
COPPER AND ALUMINUM RISE, STELLANTIS STOPPED IN USA
The news coming from the Suez Canal should bring tension down on the commodities and chips front.
The dollar is slightly appreciating against most of the reference currencies. Euro-dollar cross at 1,177.
Copper and aluminum rose while gold fell slightly to 1.727 dollars.
WTI oil is down 2% also following the news of the successful outcome of the latest attempt to refloat the Ever Giver: the container port blocking the Suez Canal is floating but its rudder is out of order, so it is not known when will be able to navigate.
Semiconductor shortages also affect North America. Stellantis has announced the closure of five factories during the week, in Mexico, Canada and Michigan.
BANCA D'ITALIA SHAREHOLDERS' MEETING ON WEDNESDAY
Among the macro data of the week, the German inflation figure will be released tomorrow; Wednesday the global forecasts of the WTO, the Japanese industrial production and the Chinese PMI index. Fourth quarter UK GDP data, Eurozone inflation and German employment data are also expected.
The Banca d'Italia meeting will take place on Wednesday with the report of the governor Ignazio Visco. Bankitalia today presents its survey on the labor market.
The government is working on the new anti-contagion decree and is accelerating the vaccination campaign. Three million doses will arrive in Italy this week.
The opinions of the Chamber and Senate on the national recovery and resilience plan (Recover Plan) will arrive between Wednesday and Thursday. The two classrooms will express themselves on the general reports that will be proposed by the respective Budget commissions in view of the final draft of the Plan.
ATLANTIA, THE BENETTONS AGAINST THE EXTENSION OF THE SPIN
On the corporate front, the spotlight is today on the Atlantia shareholders' meeting, an opportunity for discussion for shareholders awaiting the possible turnaround on Autostrade per l'Italia. The shareholders of the holding company will be asked to express their opinion on the extension of the company's partial demerger project, otherwise destined to lapse at the end of the month. Edizione has already announced that it will vote no, after having "acknowledged the absence, at the moment, of proposals from potential investors for the purchase of the stake in Acc deriving from Atlantia as a result of said demerger, equal, in transparency, to 55 % of Aspi. The Benettons (and the Crt foundation) have spoken out for the sale to Cdp, against some foreign funds. Over the weekend, the latest offer on Aspi was delivered, arriving from CDP and allied funds: the already known 9,1 billion euros were added benefits and guarantees for a value of 1,4 billion. Edizione, the Benetton holding company and the Crt foundation have expressed themselves for the sale, some foreign funds and the management have not.
The Easter week opens with a flurry of balance sheets, more than twenty, of the companies treated at the Aim.
In global finance, the balance sheet of Foxconn, the Taiwanese giant, deserves attention, back from record sales in the year of the pandemic. For the occasion, the company could announce its entry into the car market.
